Apple has usually sourced NAND chips for its products from Samsung, Hynix, and Toshiba. However, a new report from Nikkei claims that Apple is currently in talks with Chinese NAND supplier Yangtze Memory Technologies to use their NAND chips in its upcoming new iPhones and other models that it will sell in China.

There’s a catch here though; Apple will only be using the NAND chips sourced from the Chinese firm in products and variants that it sells in China. If true, this would be the first time ever that Apple has taken a decision of restricting the use of components sourced from one supplier to a particular region.

The motive behind Apple’s move is unclear as of now but it is possible that the company has taken it to please the Chinese government officials and further strengthen its ties with them. It is also possible that Apple is being forced to go through this deal due to political pressure from Beijing.

If the deal goes through, it would be a big one for Yangtze Memory. There are no NAND suppliers in China, and it would be the first company from the region once its factory starts churning out chips from later this year. The company has invested around $24 billion in setting up its first NAND chip factory lines. Due to the production starting in the later part of 2018, Apple is likely expected to source NAND chips from Yangtze in 2019 or 2020 at the earlier.

Our Take

Apple does not usually source its components from new companies so soon so its likely that the company is under some political pressure here. It is also possible that Apple is going through with this deal to gain the confidence of the Chinese government. The Chinese smartphone market is an incredibly important one for Apple and considering it has lost market share in the region in recent times, it is going to try everything in its books to turn the tide.

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